Federal Court Upholds Goss $31.6 Million Judgment Against TKS

Wednesday, June 02, 2004

Press release from the issuing company

June 1st, 2004 – Citing evidence that TKS used "a fraudulent price increase and secret $2.2 million rebate" to prevent one U.S. newspaper from purchasing Goss presses, and that TKS and its lawyers "attempted to destroy documents to conceal the secret rebates", United States District Court Judge Linda Reade issued an opinion on May 26th upholding the $31.6 million judgment that Goss International won from TKS last December. That judgment followed a three week trial in federal court in Cedar Rapids, Iowa, in which the jury found that Tokyo Kikai Seisakusho, Ltd. and its U.S. subsidiary ("TKS") had systematically dumped TKS’s press equipment on the U.S. market with the intent to destroy or injure the U.S. printing press industry.
Judge Reade’s May 26, 2004, decision denied both of TKS’s post trial motions, in which TKS had asked the judge to vacate the jury’s verdict and grant TKS a new trial.
In a sometimes scathing rebuke of TKS’s position, the court summarized the evidence showing that TKS violated the United States Antidumping Act in connection with a series of U.S. sales. Regarding TKS’s 1996 sale to one United States newspaper, for example, the Court noted that "TKS’s own lawyer, Mr. Saito, testified that the price TKS charged for the 1996 sale was a dumped price." The court also referred to evidence "that TKS agreed to a fraudulent price increase and secret $2.2 million rebate to keep [the newspaper] from purchasing the two towers from Goss in 1996."
According to the court, there was evidence that TKS and the newspaper agreed to increase the price of the press equipment "on paper" so as "[t]o make it appear to Goss that the 1996 sale was not dumped… In exchange, TKS and [the newspaper] agreed that TKS would secretly rebate $2.2 million to [the newspaper] through a combination of $1 million in cash and a promise of $1.2 million in free digital ink pumps or credit to be delivered in the future."
According to the decision, "The jury was also presented with evidence that TKS and its counsel engaged in a concerted effort to conceal the secret rebates." TKS’s own lawyer had warned TKS that putting the rebates in writing would be "incriminating" and that it should be done instead as a "handshake deal". According to the court, "There was also evidence presented at trial that TKS and its counsel attempted to destroy documents to conceal the secret rebates." There was evidence, for example, that TKS executives in Japan had issued a standing order to TKS(USA)’s employees in the United States that all documents relating to the rebate matter "should be disposed of whenever possible." Then, when TKS employees committed the secret rebate to writing, TKS executives in Japan warned that "there should not be such a document," and ordered that copies of the document "must be collected and destroyed."
In addition, the court reviewed the evidence supporting the jury’s verdict with respect to sales Goss made to two other United States newspapers. The jury awarded Goss "price suppression" damages in connection with both of those sales. The court concluded in both instances that the jury’s verdict was supported by the evidence presented at trial.
"Goss believes strongly that free and fair trade is the best course for all competitors in the market," said Bob Brown, CEO of Goss International. "The Court’s decision confirms again that TKS violated U.S. law and the rules of fair trade, and then tried to cover up its actions with secret rebates and by destroying documents. We are gratified that the court has upheld the jury’s verdict holding TKS responsible for its intentional and wrongful conduct in the U.S. marketplace."